Financial literacy diploma requirement

Editorial

Maryland Comptroller Peter Franchot is working to change the graduation requirements for the state's high school students.

Franchot wants to make financial literacy requisite for receiving a diploma, and we think this is a terrific idea.

The world is a financially complicated -- and treacherous -- place these days, and knowing one's way around the landscape can mean the difference between making the system work for you and getting taken for a ride.

In a recent e-mail, Franchot said that many Marylanders are suffering financially induced pain these days, and the cause involves not only unscrupulous lenders and reckless Wall Street high rollers, but also consumers' own ignorance.

As Franchot puts it, "too many Americans purchased financial products that they really didn't understand and entered into financial agreements that they certainly could not afford, often for the sake of buying things that they frankly did not need."

He goes on to make the case that had people of his generation had the kind of financial education that they had in reading, writing and arithmetic, "fewer would be drowning in debt today and facing the loss of their homes, their credit ratings, and their financial security."

Credit cards are an obvious example. How many consumers have gotten themselves into untenable financial straits by misusing or abusing credit cards -- or because they did not understand the conditions under which the cards were issued?

No one can put a stop to greed and other unfortunate human impulses, either in lenders or borrowers, but educating high school students about the ways of the financial world, its opportunities and pitfalls, can be priceless.

We can't think of a more practical graduation requirement than basic financial literacy. If Franchot's quest is successful, Maryland will join three other progressive states that already require their high school graduates to successfully complete a stand-alone course in financial literacy.

Franchot also tips his hat to three Maryland counties, Talbot, Carroll and Allegany, that have already established their own required financial courses.

It's high time for the rest of Maryland to join them. Financial literacy is an incredibly important life tool, and will be even more so in the complicated years ahead.

For anyone interested in reading more about this timely initiative, visit the website of the Maryland Coalition for Financial Literacy at www.mdfinancialskills.org.